Daily Brief Financials: Warehouse REIT, Sun Hung Kai Properties, UBS Group AG, Greentown China, HSBC Holdings, Truist Financial Corp, Manulife Financial, Sun Life Financial , Bitcoin Pro, Mitsubishi UFJ Financial (MUFG) ADR and more

• In this insight, we take a look at the potential index changes for F100 and F250 in the run up to the September 2023 Rebalance.
• I currently expect two changes for the F100 index and three changes for the F250 index.
• As always, there are several names lurking just outside the borders and could be involved in index changes in September 2023 if there are sharp price changes.

• In this insight, we conducted fundamental analysis for SHKP, which is a proxy for Hong Kong given 70% of its GAV comes from Hong Kong
• SHKP has well diversified businesses in residential, retail and office in Hong Kong and China, and there are a lot of share price drivers
• We would recommend a BUY as long as the stock trades below HKD100, as the stock has a trading range of HKD100 to HKD 130

• This is our first report on UBS Group AG, one of the largest banking service companies.
• The company delivered a decent result in the last quarter driven by strong flows across Global Wealth Management and Asset Management.
• The company will continue to prioritize a capital-light and client-focused Investment Bank model while managing activities outside its strategic focus.

We view Greentown China as “Medium Risk” on the LARA scale. The company is an established residential property developer targeting high-end markets, mainly in Eastern China (i.e. Zhejiang province). Greentown has an SOE background, with its largest shareholder China Communications Construction Group (CCCG; 28% stake) being an SOE under the central government. Greentown also has strong branding.

Our Credit Bias on the company is “Stable”, on account of the: [1] resilient contracted sales and revenue growth; [2] adequate liquidity; and [3] access to diversified onshore financing channels. We believe Greentown is well-supported by CCCG. That said, we remain concerned over the high JV usage, which diminishes financial transparency.

We maintain our “Hold” recommendation on the GRNCH curve. We note that Greentown no longer issues USD perpetuals and has limited offshore maturities. We also note that the GRNCH 2025 bonds are trading c. 150 bps wider than the notes by peer China Jinmao (BBB-). This is likely due to a three-notch rating difference, given Greentown’s higher leverage. However, the two developers share the same ultimate central state parent, and we believe Greentown does not lack financial access or liquidity.

• This is our first report on HSBC Holdings PLC, one of the biggest banks and financial service providers in the world.
• Notably, Hong Kong, Mainland China, the Middle East, and the U.K. have shown strong economic resilience and recovery.
• We initiate coverage on the stock of HSBC Holdings PLC with a ‘Hold’ rating.

• This is our first report on Truist Financial Corporation, one of the largest regional banks in the United States.
• Truist opened 146,000 bank accounts online.
• We initiate coverage on the stock of Truist Financial Corporation with a ‘Hold’ rating.

• This is our first report on Manulife Financial Corporation, a leading financial products and services provider.
• Despite a difficult market and operating environment, Manulife produced strong core earnings and sustained an increase in adjusted book value per share.
• We initiate coverage on the stock of Manulife Financial Corporation with a ‘Buy’ rating.

• This is our first report on Sun Life Financial, a prominent financial service provider.
• Sun Life US and Sun Life Canada delivered solid earnings driven by growth across their business lines.
• We initiate coverage on the stock of Sun Life Financial Inc. with a ‘Hold’ rating.

• After years of waiting, Ripple finally got a ruling in their highly anticipated lawsuit with the SEC: the company did not violate federal securities law by selling its XRP token on public exchanges.
• The market reaction was near instantaneous.
• Since Thursday, XRP is up 61% and several exchanges that had previously de-listed the token, including Coinbase and Kraken, immediately re-listed it.

• This is our first report on one of the largest banking and financial partners, Mitsubishi UFJ Financial Group.
• The company plans to utilize its group-wide customer base, including Asian partner banks and Morgan Stanley, to navigate the final year of the current Medium-Term Business Plan (MTBP).
• We initiate coverage on the stock of Mitsubishi UFJ Financial Group, Inc. with a ‘Hold’ rating.